Asger Risom
Tesla investors have handed Elon Musk a historic victory, approving the largest corporate compensation deal ever proposed.
Tesla investors have handed Elon Musk a historic victory, approving the largest corporate compensation deal ever proposed — a package worth up to $1 trillion tied to his ambitious plans to transform the electric carmaker into a leader in artificial intelligence and robotics.
Historic approval in Austin
At Tesla’s annual meeting in Austin, Texas, on Thursday, shareholders voted overwhelmingly — with more than 75% in favor — to endorse Musk’s new compensation plan. The CEO, already the world’s richest person, celebrated the result on stage alongside dancing robots, telling cheering investors: “What we are about to embark upon is not merely a new chapter of the future of Tesla, but a whole new book.”
The approval follows months of debate over Musk’s compensation and his growing influence over the company. The board had warned that Musk could walk away if the deal was rejected, arguing the plan ensures Tesla continues to benefit from his leadership as it pushes into AI-driven products, including self-driving vehicles, robotaxis, and humanoid robots.
A pay plan unlike any other
The 10-year pay package links Musk’s compensation directly to Tesla’s performance, both operationally and in market valuation. Each time Tesla achieves a milestone — such as delivering 20 million vehicles, launching 1 million robotaxis, or earning $400 billion in profit — Musk receives 1% of Tesla’s stock.
To unlock the entire package, Tesla’s market value would have to climb from its current $1.5 trillion to $8.5 trillion. If all goals are met, Musk could collect up to 12% of Tesla’s total shares, worth around $878 billion after adjustments.
Supporters say the deal motivates Musk to deliver extraordinary growth. “If completed, these tranches of awarded shares follow strong improvements in revenue growth for Tesla,” said Brian Mulberry, a portfolio manager at Zacks Investment Management.
Critics, however, question the sheer scale of the payout. Some investors — including Norway’s sovereign wealth fund — and major proxy advisors Glass Lewis and Institutional Shareholder Services opposed the plan, warning of excessive dilution and poor governance.
Power, politics, and future plans
The meeting also saw shareholders approve Musk’s proposal for Tesla to invest in his AI startup, xAI, despite many abstentions. Analysts said the move reflects investor hesitance about potential conflicts of interest between Musk’s overlapping ventures, which also include SpaceX and Neuralink.
“Investors will be looking for assurances that there are guardrails in place to prevent too much mixing of businesses,” said Jessica McDougall of Longacre Square, a governance advisory firm.
Tesla’s board was also re-elected, and shareholders approved annual elections for all board members. Analysts viewed the overall vote as a strong endorsement of Musk’s leadership and a signal that investors expect his bold AI vision to drive long-term value.
The road ahead
Musk’s plan now cements his control over Tesla’s future as he pursues what he calls a “robot army.” He promised shareholders that production of the Cybercab, Tesla’s first steering-free robotaxi, will begin in April, alongside the unveiling of a next-generation Roadster sports car. He also hinted at plans for a “gigantic chip fab” to power Tesla’s AI ambitions, potentially in collaboration with Intel.
Despite controversy over his political rhetoric and side ventures, investors appear to have decided that Tesla’s growth story is inseparable from Musk himself. As he put it on stage: “Other shareholder meetings are like snoozefests, but ours are bangers.”
This article is made and published by Asger Risom, who may have used AI in the preparation
